Oracle Calls Out Amazon, Salesforce

Oracle CEO Larry Ellison said last week that his main rivals were the new generation of cloud companies, and that IBM and SAP were no longer in his gun sights.

Oracle is focusing on cloud infrastructure companies such as Amazon and SaaS providers such as former ally Salesforce.com, Ellison told attendees at CloudWorld in San Francisco.

"Oracle may have some big ambitions, but if it thinks it's going to severely dent this IaaS/PaaS market share picture any time soon, it's kidding itself," John Dinsdale, chief analyst at the
Synergy Research Group, told CRM Buyer.

"IBM, Microsoft and Google are all pushing very hard and aggressively growing their IaaS/PaaS revenues, but [Amazon Web Services] remains in a league of its own," he continued.

Larry's Vaulting Ambition

While Ellison repeatedly had dismissed the cloud in the past, he sang a slightly different tune at Oracle OpenWorld 2010, describing it in Amazon's terms -- as a hardware and software platform.

It took Oracle 10 years to make its applications available as cloud services because the company offers lots of applications, Ellison reportedly explained. The company had to rewrite all these apps, as well as its Java middleware, and it had to convert its database to multitenancy to host SaaS applications.

Multitenancy has long been espoused by Salesforce.com as being at the heart of SaaS.

Oracle announced 10 cloud computing services at OpenWorld in September. Its cloud applications include CRM on Demand and the Oracle Human Capital Management Cloud.

Customer service and human capital management applications are the two most important business apps now, Ellison reportedly told the CloudWorld audience.

Getting to Know You

Modern business apps need to be built around social networking and should be easy to use, Ellison also said last week, according to reports, noting that Oracle's cloud apps have a user interface modeled after Facebook and that the interfaces Oracle and archrival SAP built 10 years ago were no longer appropriate.

The social component at a business app's core connects employees to each other and to the enterprise, Ellison reportedly said.

"What major vendors now call "social" is what they used to call "collaboration," remarked Charles King, principal at Pund-IT.

Assessing Oracle's New Direction

Oracle will offer both packaged software and cloud-based applications for now, King told CRM Buyer.

"Many of its enterprise customers would be loath to move business-critical databases into public or hybrid clouds," he explained. "Moving in a direction similar to IBM's strategy via the SoftLayer acquisition seems likely for Oracle. If they don't, they risk others pulling the cloud out from under them."

Right now, Amazon and Microsoft are locked in a price war over cloud services.

Amazon slashed prices in January for EBS Standard volume storage and I/O operations by up to 50 percent and for S3 storage by up to 22 percent.

Microsoft followed suit the same day, citing its pledge with last April's announcement of cloud infrastructure services.

SAP and IBM may well be ahead of Oracle in the cloud game.

SAP offers cloud services both through partners and through its HANA enterprise cloud.

IBM has had a worldwide cloud computing strategy for years, and earlier this month committed more than US$1.2 billion to expanding its global cloud footprint.

"Publicly turning his attention from IBM and SAP is something of a sleight-of-hand trick by Ellison," Pund-IT's King suggested. "Yes, AWS constitutes a great threat to Oracle's future business, but IBM and SAP remain formidable competitors."